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PayPal's New Commerce Platform to Boost E-commerce Presence

Zacks Equity Research

PayPal Holdings, Inc. PYPL is leaving no stone unturned to bolster its presence in the booming e-commerce market on the back of its improved offerings.

This is evident from its latest move of launching a new solution, PayPal Commerce Platform, which offers an amalgamation of its technologies, tools, services and financing for businesses of all sizes, and back-end systems like compliance and account authentication.

Notably, PayPal with its new platform strives to cater to needs of e-commerce companies, marketplaces and crowdfunding platform by allowing merchants to accept payments and shoppers to checkout via their PayPal accounts globally.

Further, with a special focus on small sellers, PayPal Commerce Platform offers fraud protection services backed by AI and Machine Learning (ML) techniques. With the help of these the company aims to aid these sellers to strengthen their businesses by providing them online shopping infrastructure similar to the ones leveraged by large merchants.

We believe the above-mentioned functions and features are likely to aid the adoption rate of the new solution. Further, PayPal is expected to gain further traction among the e-commerce companies and small merchants on the back of its latest move.

E-commerce Market Holds Promise

In today’s fast moving world, e-commerce has gained immense popularity driven by increased penetration of internet and mobile phones. The e-commerce market has resulted in growing proliferation of online payment services and apps.

According to data from Statista, revenues in this particular market are expected to hit $2.03 trillion in 2019 and $2.85 trillion in 2023 at a CAGR of 8.9% between 2019 and 2023. Further, user penetration in the market for 2019 is pegged at 51% and is likely to reach 58.5% by 2023.

Per Technavio latest report, the global e-commerce payment market is expected to generate $135 billion by 2022.

We note that the latest platform of PayPal enhances its offerings in this market. Social media giant, Facebook’s FB Instagram Checkout and Marketplace platforms have begun leveraging PayPal’s two sided networks via the new commerce platform.

Additionally, several leading platforms such as BigCommerce, Grailed, Lightspeed, Prestashop, Shopware and Yahoo! Small Business have also shown interest in adopting PayPal Commerce Platform.

Consequently, the new launch makes the company well poised to rapidly penetrate this market.

PayPal Holdings, Inc. Revenue (TTM)

 

PayPal Holdings, Inc. Revenue (TTM)

PayPal Holdings, Inc. revenue-ttm | PayPal Holdings, Inc. Quote

Deepening Focus on E-commerce

The latest move bodes well for the company’s growing focus toward e-commerce sector.

Apart from the new platform, PayPal acquired Hyperwallet which is a payout platform that offers integrated payment solutions to enterprises, marketplaces, e-commerce and on-demand platforms. Consequently, PayPal is now able to offer an end-to-end payment solution to marketplaces and e-commerce companies, making their payment process smoother and hassle free.

Further, its agreement to acquire Simility which develops fraud prevention technology solutions remains a major positive. With this buyout, the company strives to deliver an effective risk management solution to the e-commerce companies and online merchants.

Additionally, PayPal’s latest investment in MercadoLibre’s MELI is acting as a tailwind. With the deal, both the companies are aiming to expand their reach in e-commerce and online payment markets.

We believe all the strong endeavors will continue to aid its position in the e-commerce market.

Zacks Rank & Another Stock to Consider

Currently, PayPal carries a Zacks Rank #2 (Buy).

Another top-ranked stock that can be considered in the broader technology sector is eGain Corporation EGAN sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for eGain is currently pegged at 30%.

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